Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2011

Goodwill and Intangible Assets

Goodwill and Intangible Assets

4.  Goodwill and Intangible Assets

Goodwill and intangible assets consist of the following:

	As of December 31, 2010
	Cost		Accumulated Amortization		Net Book Value
Goodwill	$	58,608			$	58,608
	$	58,608			$	58,608
Intangible assets:
Trade Name	$	14,050	$	—	$	14,050
Non-compete agreements	4,041		3,995		46
Contract rights	237,888		60,966		176,922
Distribution rights	1,623		621		1,002
Deferred financing costs	6,798		3,674		3,124
	$	264,400	$	69,256	$	195,144

	As of September 30, 2011
	Cost		Accumulated Amortization		Net Book Value
Goodwill	$	58,281			$	58,281
	$	58,281			$	58,281
Intangible assets:
Trade Name	$	14,050	$	—	$	14,050
Non-compete agreements	3,187		3,163		24
Contract rights	237,798		69,841		167,957
Distribution rights	1,623		743		880
Deferred financing costs	6,798		4,331		2,467
	$	263,456	$	78,078	$	185,378

Estimated future amortization expense of intangible assets consists of the following:

2011 (three months)	$	3,709	(1)
2012	12,281
2013	11,960
2014	11,855
2015	11,740
Thereafter	118,830
	$	170,375

(1) Reflects the accelerated amortization of deferred financing costs related to the redemption of a portion of our senior notes.

Amortization expense of intangible assets for the nine months ended September 30, 2010 and 2011 was $9,930 and $9,676, respectively.

Intangible assets primarily consist of various non-compete agreements, and contract rights recorded in connection with acquisitions. The deferred financing costs were incurred in connection with our senior secured credit facility and our senior notes and are amortized from five to ten years. The non-compete agreements are amortized using the straight-line method over the life of the agreements, which range from five to fifteen years. Contract rights are amortized using the straight-line method over fifteen to twenty years. The life assigned to acquired contracts is based on several factors, including:  (i) the historical renewal rate of the contract portfolio for the most recent years prior to the acquisition, (ii) the number of years the average contract has been in the contract portfolio, (iii) the overall level of customer satisfaction within the contract portfolio, and (iv) our ability to maintain comparable renewal rates in the future. The contract rights acquired are aggregated for purposes of calculating their fair value upon acquisition due to the fact that there are thousands of individual contracts in each market. No single contract accounts for more than 2% of the revenue of any acquired portfolio and the contracts are homogeneous. The fair values of acquired portfolios are established based upon discounted cash flows generated by the acquired contracts.  The fair values of the contracts are allocated to asset groups, comprised of the Company’s geographic markets, based on an estimate of relative fair value.